The 2026 tax law changes, in plain English
Reviewed by our office. Updated June 2026.
The One Big Beautiful Bill Act added real money-saving deductions for working people. Here is what changed, who qualifies, and how to claim it without the guesswork.
No tax on tips
Deduct up to 25,000 dollars of qualified tips per worker. Phases out above 150,000 dollars income (300,000 dollars joint). See the tips rules.
No tax on overtime
Deduct up to 12,500 dollars of overtime pay (25,000 dollars joint). Same income phase-out. See the overtime rules.
Senior deduction
Filers 65 and older get an extra 6,000 dollars deduction through 2028. See the senior rules.
What actually changed for 2026?
The law created three new above-the-line style deductions claimed on the new Schedule 1-A: qualified tips, qualified overtime, and an enhanced deduction for seniors. It also raised the standard deduction and lifted the Child Tax Credit to 2,200 dollars. Most of these provisions are temporary and run through tax year 2028. Source: IRS One Big Beautiful Bill provisions.
Who benefits the most?
Tipped workers, hourly employees who work overtime, and households with a member 65 or older see the biggest change. Because the tips, overtime, and senior deductions stack on top of the standard deduction, many filers who never itemized can now lower taxable income. We check every return for these.
How do I claim the new deductions?
You report total income as usual, then claim the qualifying amounts on the new IRS Schedule 1-A attached to your Form 1040. Tips can come from a W-2, a 1099, or Form 4137. Getting the income matching right is where mistakes happen, so a real preparer review matters. Source: IRS Schedule 1-A guidance.
Common questions
What is the One Big Beautiful Bill Act and does it affect my 2025 return?
It is the 2025 federal tax law that created several new deductions for tips, overtime, and seniors, plus higher standard deductions and a larger Child Tax Credit. Many provisions start with the 2025 return you file in 2026, so they affect this filing season.
Do I claim the new tips, overtime, and senior deductions even if I take the standard deduction?
Yes. These three deductions are claimed on the new IRS Schedule 1-A and can be taken in addition to the standard deduction. You do not have to itemize to benefit, which is a change worth checking on every eligible return.
What is the standard deduction for 2026?
For tax year 2026 the standard deduction is 32,200 dollars for married couples filing jointly, 16,100 dollars for single filers, and 24,150 dollars for heads of household. The Child Tax Credit also rose to 2,200 dollars per qualifying child.
How does Zero Fuss Taxes make sure I get every new 2026 deduction?
A real preparer reviews your documents against the current law, applies the tips, overtime, and senior deductions on Schedule 1-A where you qualify, and gives you one written quote first. You see the price before any work starts, with no refund-based fees.